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Additional support for areas hit by local restrictions

Duncan & Toplis | 22 October 2020

Open businesses which are experiencing considerable difficulty will be given extra help to retain employees as government significantly increases contribution to wage costs under the Job Support Scheme and business contributions drop to 5%.

Business grants are expanded to cover businesses in particularly affected sectors in high-alert level areas, helping them stay afloat and protecting jobs as well as grants for the self-employed doubled to 40% of previous earnings.

Job Support Scheme (JSS)

Recognising the pressure businesses in some sectors and areas are facing, the announcement on 22 October lightens the burden of retaining employees.

When originally announced, the JSS – which will come into effect on 1 November – saw employers paying a third of their employees’ wages for hours not worked and required employees to be working 33% of their normal hours.

This announcement reduces the employer contribution to those unworked hours to just 5% and the minimum hours requirements to 20%, so those working just one day a week will be eligible. That means that if someone was being paid £587 for their unworked hours, the government would be contributing £543 and their employer only £44.

Employers will continue to receive the £1,000 Job Retention Bonus. The JSS Closed for businesses legally required to close remains unchanged.

Self-Employment Grant

Today’s announcement increases the amount of profits covered by the two forthcoming self-employment grants from 20% to 40%, meaning the maximum grant will increase from £1,875 to £3,750.

This is a potential further £3.1 billion of support to the self-employed through November to January alone, with a further grant to follow covering February to April.

Business Grants

The Chancellor has also announced approved additional funding to support cash grants of up to £2,100 per month primarily for businesses in the hospitality, accommodation and leisure sector who may be adversely impacted by the restrictions in high-alert level areas.

These grants will be available retrospectively for areas who have already been subject to restrictions and come on top of higher levels of additional business support for Local Authorities moving into Tier 3 which, if scaled up across the country, would be worth more than £1 billion.

These grants could benefit around 150,000 businesses in England, including hotels, restaurants, B&Bs and many more who aren’t legally required to close but have been adversely affected by local restrictions nonetheless.


Previous update

On Friday 9 October, the chancellor announced that the Job Support Scheme would be expanded to include businesses required to close due to localised restrictions.

The Job Support Scheme (JSS) will be expanded to support businesses across the UK required to close their premises due to coronavirus restrictions. The government will pay two thirds of employees’ salaries to protect jobs over the coming months.

Cash grants for businesses required to close in local lockdowns also increased to up to £3,000 per month.

Under this expansion, firms whose premises are legally required to shut for some period over winter as part of local or national restrictions will receive grants to pay the wages of employees who cannot work - protecting jobs and enabling businesses to reopen quickly once restrictions are lifted.

The government will support eligible businesses by paying two thirds of each employees’ salary (or 67%), up to a maximum of £2,100 a month.

Under the scheme, employers will not be required to contribute towards wages and only asked to cover NICS and pension contributions. However, businesses will only be eligible to claim the grant while they are subject to restrictions and employees must be off work for a minimum of seven consecutive days.

The scheme will begin on 1 November and will be available for six months, with a review point in January 2021. In line with the rest of the JSS, payments to businesses will be made in arrears, through a claims service by HM Revenue & Customs that will be available from early December. Employees of firms that have been legally closed in the period before 1 November are eligible for the Coronavirus Job Retention Scheme.

In addition to the expansion of the JSS, the government is making the Local Restrictions Support Grant scheme more generous so that businesses in England can receive up to £3,000 per month, and are eligible for payment sooner, after only two weeks of closure rather than three. This could benefit hundreds of thousands of businesses, including restaurants, pubs, nightclubs, bowling alleys and many more.

The government's fact sheet is available here.

 

If you would like professional advice or guidance on securing funding support for your business, please contact us.

 

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